Oil stable as rising virus cases, higher U.S. crude stockpiles stall recovery

[July 08, 2020]  By Shadia Nasralla

LONDON (Reuters) - Oil prices were broadly stable for a fourth session on Wednesday, with rising U.S. crude stockpiles and an increase in U.S. coronavirus infections arresting a recent recovery sparked by easing lockdowns.

Brent crude futures rose 10 cents to $43.18 a barrel by 1135 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 3 cents at $40.65 a barrel.

Both benchmarks are set for a fourth session of daily percentage changes of less 1% in either direction.

The U.S. coronavirus outbreak crossed a grim milestone of over 3 million confirmed cases on Tuesday as more states reported record numbers of new infections.

U.S. crude oil stockpiles rose last week, although gasoline and distillate inventories fell more than expected, data from industry group the American Petroleum Institute showed.

"Yesterday's lull in price action in the oil market is continuing this morning even as sentiment is sullied by renewed U.S. glut fears," said PVM analysts in a note. "The search continues for a catalyst to break oil out of its range."

The U.S. Energy Information Administration (EIA) said on Tuesday that U.S. crude oil production is expected to fall by 600,000 barrels per day (bpd) in 2020, a smaller decline than the 670,000 bpd it forecast previously.

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant

EIA crude stock data is due later on Wednesday.

Key ministers in the OPEC+ grouping of oil exporters are due to hold talks next week about the future of their record output cut deal, which is due to taper off from next month.

Abu Dhabi National Oil Co (ADNOC) plans to boost oil exports in August, the first signal that OPEC+ countries are preparing to ease output cuts, three sources familiar with the development told Reuters.

Meanwhile, Libya's National Oil Corporation said a forced shutdown in production since January was expected to result in output dropping to 650,000 bpd in 2022 from about 1.2 million bpd achieved at the start of 2020.

(Additional reporting by Yuka Obayashi in TOKYO; Editing by Louise Heavens and Jan Harvey)

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